Wall Street loses momentum
Wall Street has been on the rise for weeks, but now the upward trend appears to be coming to an end. US inflation data is giving investors hope. In contrast, the eagerly awaited meeting between Biden and Xi will have little effect.
After the recent sharp rises, Wall Street was little changed. The Dow Jones index closed 0.1 percent lower at 34,945 points. The S&P 500 and the Nasdaq Composite each rose by 0.1 percent. There were a total of 1,086 (Wednesday: 1,586) price gainers and 1,761 (1,276) price losers. A total of 89 (87) shares closed unchanged. The air is now gradually becoming thin after the rapid rise of recent weeks, traders said.
Nevertheless, the inflation data "strengthened investors' conviction that the Fed could refrain from another rate hike" and raised expectations that the Fed could cut rates next May, CPT Markets said. In the US economic data published before the market opened, the focus was on weekly initial jobless claims. These rose more sharply than expected. The data points to an easing in the labor market and also supports hopes of an end to interest rate hikes by the US Federal Reserve, participants said.
The situation in US industry in the Philadelphia region brightened somewhat more than economists had expected in November. Industrial production fell slightly more than forecast in October compared to the previous month. US import prices fell in October for the first time since June, and more sharply than expected, suggesting that inflationary pressures may be easing more significantly.
US-China summit without impetus
Among the individual stocks, shares in Cisco Systems fell by 9.9 percent after the network equipment provider lowered its sales forecast for the current year. The company narrowly beat analysts' estimates for sales and profits in the first quarter.
In contrast, the eagerly awaited meeting between US President Joe Biden and Chinese leader Xi Jinping failed to provide any impetus. Essentially, the two sides merely agreed to resume military communication.
The US dollar was little changed. After the stronger than expected rise in initial claims, investors have another reason to bet that the interest rate hikes that have supported the dollar are over, it was said. Oil prices fell sharply. The trigger for the current downward movement was the rise in US crude oil inventories the previous day. There were also concerns about China's weak demand.
Walmart and Alibaba lose ground
Yields on the bond market gave back some of their previous day's gains. There had been a countermovement here after the crash on Tuesday in the wake of lower-than-expected US inflation data. Now labor market data and import prices are supporting prices. The yield on ten-year securities lost 8.1 basis points to 4.45 percent.
Walmart shares fell by 8.1 percent. Although the US retail group posted higher sales and earnings than expected in the third quarter, it disappointed with its increased forecast for the year. Alibaba shares fell by 9.1 percent. The Chinese e-commerce giant increased its turnover in the second quarter and was back in the black. However, the rejection of the planned spin-off of the cloud division was a particular burden. Alibaba announced that it would reject the spin-off due to the Biden administration's recent measures to expand export controls on advanced chips and semiconductor equipment.
Palo Alto Networks fell 5.4 percent. The cybersecurity company reported first-quarter earnings and revenue that exceeded market forecasts. However, estimates for the current quarter and the 2024 financial year fell short of expectations.
The Dow Jones index, a key indicator of Wall Street's performance, closed lower, reflecting a slight pause in the market's upward trend. Despite this, the strong inflation data reinforced investors' belief that the Federal Reserve might hold off on another interest rate hike.
In the aftermath of the US-China summit, the US dollar showed little change, as investors began to speculate that the interest rate hikes that had previously boosted the dollar could be coming to an end.
Source: www.ntv.de
